Chancellor Rachel Reeves

LABOUR councillors conceded this week that there was little chance of a cash injection for local government in the short-term despite the party’s landslide win at the general elections.

They said they acknowledged that Chancellor Rachel Reeves needed to make difficult decisions “to balance the national finances”.

In the past, local spending pressures have been squarely blamed on the Conservative central government’s cuts.

It was regularly argued that efforts to build more social housing, and improve local services, have been hamstrung by “awful” Tory slashing of local government budgets.

Things would change if the Conservatives were defeated, residents were told.

But the new prime minister Sir Keir Starmer and Ms Reeves have been noticeable in their lack of commitment to increase funding for local authorities.

Labour councillor Kaya Comer-Schwartz, leader of Islington Council, said: “We have been asking for more money really directly, and I think they [Labour central government] know that we can’t carry on this way.

“But there is no magic money tree and a £22billion gap caused by Tory austerity is not going to change overnight.”

Cabinet councillor Diarmaid Ward, the council’s finance chief, said he was “not going to pretend things are sunshine and roses” when asked whether the Town Hall could keep going without being given a bigger budget from the counterparts they now have in government.

He told the Tribune: “Let’s be in no doubt, local government needs hard cash, however things are already looking more positive, because two of the things in the Labour manifesto that don’t cost an extra tuppence.”

He said this included councils being given the chance to work around multi-year financial settlements – hardly headline-seizing stuff, but a change which he said would allow Islington to plan better for the future.

He said: “Instead of every single year, us trying to work out ‘are we going to get a little bit more?’ or ‘can we actually keep the lights on this time round?’ we are able to plan, three-year plans, five-year plans, and actually know how much resources are out there.”

Islington was well-represented here in Liverpool where members delighted in a third gathering in Merseyside in a row – but the first with the party in power.

Cllr Ward added: “Councils do need more money, but the grown-ups are in charge. Labour are responsibly looking at the finances. There is a £22billion black hole, but the fact that the grown-ups are in charge and are talking to local councils, that is the start we need.”

But critics at the conference – including several campaigners from the unions – said it was fair to ask whether these “grown-up” decisions were austerity measures masquerading as financial responsibility.

But Cllr Comer-Schwartz said: “Rachel Reeves did not create this problem. Tory austerity for 14 years created this problem, and that’s something in local government that we’ve had to deal with.”

Councillor Ward had much the same line, adding: “In Islington, we’ve had to deal with 14 years of Tory austerity. People bandy that word around a lot, but cuts have consequences, and those 14 years of austerity have been awful for the people of Islington.”

Among those urging caution was Mick Lynch, head of the RMT union, who after one fringe meeting told the Tribune that the Labour government was “implementing Tory agendas through these fiscal rules”.

He said it was an “unwise decision” to “stick to fiscal commitments that the Tories set down”, adding: “If you have Tory financial rules then you’re going to get Tory policies delivered.”